The bankrupt cryptocurrency lender Celsius Network’s request to convert its cryptocurrencies into Bitcoin BTC and Ether (ETH) has been approved by the Southern District of New York bankruptcy court.
The liquidations will make it possible for the money to be distributed to creditors soon, per the court’s decision, which was issued by Judge Martin Glenn.
As a sequel to the discussions between Celsius and the U.S. Securities and Exchange Commission (SEC), the plan was formally approved and the format for the conversion was laid.
As of November 25, 2022, Celsius was in control of 90 million MATIC, 103 million ADA, 161,000 SOL, 3.3 million LINK, 1.8 million polkadot (DOT), 200,000 litecoin (LTC), and 106,000 AAVE, according to court filings from last December. What the company’s present holdings in those assets are and how much of them will be excluded from the sale were not clear.
As of publication, the value of the positions was more than $170 million. Additionally, Celsius has 650 million of its own CEL tokens, worth millions more in stablecoins. Approximately, that tranche is worth around $100 million, according to Coinmarketcap, but it’s still uncertain whether Celsius could sell its native asset.
As stated in the court ruling, Celsius Network is to “sell or convert any cryptocurrency assets, excluding tokens associated with Withhold or Custody accounts, into BTC or ETH starting from July 1, 2023.”
The demise of the Terra ecosystem and its tokens Terra (LUNA) and TerraUSD (UST) has forced Celsius to declare bankruptcy in 2022. This has left creditors in oblivion, waiting for a resolution. Although the bankruptcy petition was filed a few months back, the recent decision has expanded the process and opened up additional options.
This move to convert all altcoins to Bitcoin (BTC) and Ether (ETH) comes as no surprise following SEC’s recent crackdown on altcoins, categorizing them as securities. In response to this, most cryptocurrency companies have decided to convert their altcoins to either Bitcoin or Ether just as Celsius is planning to do starting today the 1st of July 2023.
This move in a way fulfills the promises of the new owners of Celsius who have promised to develop a revised bankruptcy plan after taking over stewardship in May 2023. Although the mode of distribution is still unknown, Fahrenheit the new owners of Celsius will disburse creditors’ funds in BTC and ETH.